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This is, FWIW, an absolutely no-brainer move for almost any SaaS business: if a user signals severe financial stress and needs a one-time discount, give it to t
by patio11 12y ago
This is, FWIW, an absolutely no-brainer move for almost any SaaS business: if a user signals severe financial stress and needs a one-time discount, give it to them. You have two options: a) future LTV = 0 (they cancel immediately) b) future LTV > 0.
This is not a hard call. I have, incredibly, had some people disagree with me loudly on this.
My usual copy for this is: "Don't worry Bob. I've run a small business for 8 years. We've all been there before. Tell you what, I'm comping you the next three months. You worry about getting things humming again, I'll deal with the accountant. [+]"
[+] A little white lie. My accountant naturally does not ordinarily second guess my marketing decisions, particularly when they're numbered in the low three figures, but injecting him into the discussion keeps us honest about this being a matter of business-to-business professional courtesy rather than personal charity (which doesn't have an expiration date).
- elamadej 12y agoIn some cases the LTV <0 (when you need to give a refund to a company that might go out of business). That's a harder call.
- patio11 12y agoAt low-touch SaaS price points, eating a one-month refund shouldn't take more than an eyeblink of consideration. (That's certainly how long the credit card company will give it when they call to chargeback anyhow.)
- HeartlessCEO 12y agoThis guys startup almost died because he was incompetent and dishonest. New Republic documented it.... http://www.newrepublic.com/article/119350/amicus-app-how-tech-investors-are-failing-due-diligence http://www.newrepublic.com/article/119350/amicus-app-how-tec... More than $500,000 in tax liabilities! $100,000 in unpaid legal bills! No workers comp for employees! All hidden from his cofounders on top of lies about his education. Thats what passes for a startup these days??! The companies that bent over to help this so called startup are fools.